Microsoft Invests 9.7 Billion Dollars in IREN

Microsoft Takes the Reins with IREN

Microsoft is representing a significant transformation in the cryptocurrency mining sector with its approximately $9.7 billion deal with IREN. In a statement made on Wednesday, IREN, based in Australia, became Microsoft's largest customer. Under this five-year agreement, this neo-cloud operator specializing in data centers for AI workloads will provide Microsoft access to Nvidia chipsets.

IREN stocks saw a 10% increase on the first day and have recorded approximately a 580% rise since the beginning of the year.

Additionally, IREN formed a partnership with Dell Technologies worth approximately $5.8 billion to purchase processors and related equipment. This agreement reinforces the transformation of cryptocurrency miners into a central player in the AI wave and seeks to leverage land, energy, and data centers for AI workloads through long-term contracts.

Many miners, including Riot, TeraWulf, and Cipher Miner, have directed their resources towards high-performance computing infrastructure and AI. This shift has resulted in an approximate 100%, 160%, and 360% increase in the stocks of these companies throughout the year, respectively.

Bernstein analyst Gautam Chhugani and his team stated, "Bitcoin miners are now an integral part of the AI value chain. They provide warmed power shells for AI data centers, which is considered the biggest bottleneck for execution."

Chhugani added, "Every Bitcoin miner listed on the US stock exchange has undergone a transformation towards optimizing the value of energy assets rather than maximizing Bitcoin earnings." Fluctuations in Bitcoin prices and a crowded mining field have squeezed profit margins, while Bitcoin's four-year 'halving' event has further eroded revenues over time.

IREN announced earlier this year that it would no longer expand its Bitcoin mining operations and would prioritize its AI cloud and data center business. Bernstein has assigned a price target of $75 for the stocks with a 'Buy' rating, stating, "We believe there is still room for multiple expansions as IREN continues to scale its AI business."